This article was written by Phineas Upham
In the next four to five years, the amount of hours spent watching people play video games online will have grown to 6.5 billion. That is a huge chunk of media time, and Amazon has announced it wants a piece of that in the form of a company named “Twitch.Tv.”
Twitch is like the YouTube of online gaming videos. It hosts videos pre-recorded, and it also allows gamers to stream their current game state using a variety of third-party applications. Gamers accept donations in the form of subscriptions, which entitle their audience to enjoy their streams ad-free along with other benefits. The company has not defined any one model to monetize, but plays around with a few ad supported services.
Twitch has become as integral to gaming as YouTube. It is a service that allows developers to present work in progress to a live audience, culling feedback in real-time. It is used by tournament hosts to present high-quality broadcasts of live events, similar to the already gigantic Korean culture surrounding StarCraft on television. Independent gamers have been able to build careers for themselves off of hosting live chats while playing games.
Twitch is, in a lot of ways, a new form of social media. It grew from Justin.Tv, which is in the process of shutting down by September of 2014. The site used to host many kinds of live content streaming, but after it spun off Twitch as its own entity it has focused its efforts on growing that brand.
About the Author: Phineas Upham is an investor at a family office/hedgefund, where he focuses on special situation illiquid investing. Before this position, Phineas Upham was working at Morgan Stanley in the Media & Technology group. You may contact Phineas on his Twitter page.